- The Commensurability Problem
.......................................................................................................................................................................................
Once attributes of well-being have been valued in the way discussed above, policy
makers have to compound these attributes into a single aggregated standard so as to
decide who in a society should be given scarce resources. To do so, various attributes of
individual well-being need to be commensurate across lives so that an increase in well-
being for individual A can be weighed against the forgone improvement individual B
would have experienced. This next phase in public decision making, however, gives rise
to various issues that we will draw out against the background of health care as the
second policy domain that governments tend to subject to economic evaluations.
The provision of health care is an activity diVerent from other policy domains on
many levels, with important ramiWcations for the applicability of economic evalu-
ations. Individuals do not willingly enter the health care market as they do for other
services that governments might provide. Nor do they know when they will be in
need of health care or what form of health care they will then require (Arrow 1963 ).
As patients rarely have experience from previous purchases of health care, these
decisions are in general not made by the consumer either but by a doctor. The doctor
is also seen to be better equipped to calculate the many probability terms involved in
the health prospects of alternative treatments. In economic parlance, she acts for the
patient as anagent, a special relationship that creates two important dissociations.
First, the consumer becomes dissociated from the market. Health care services are
sought after not based on preferences of the consumer alone, as indiVerence map
demand theory in economics would assume, but they are either split or based solely
on those of the agent (Mooney 1992 , 67 – 82 ). Price formation theory, too, is repudi-
ated as the consumer is rarely able to make a rational, informed choice in the market.
He has only little information about the level of beneWt or well-being various health
care services and medical treatments might provide. These information asymmetries
might be brought about consciously—by the doctor withholding information from
his patient or vice versa, by the patient concealing the true nature of her illness—or
are merely due to the highly specialized knowledge required to understand the causes
and eVects of illnesses. The claim that consumers seek health care is therefore
misleading too: individuals do not seekhealth care. Rather their goal ishealth. This
is an important distinction: while health care resources are consumed by medical
personnel, it is the patient who experiences the anticipated improvements in health
and welfare that the resource consumption promises.
Second, the government as Wnancial supplier becomes dissociated from the
market also. Doctors as street-level providers possess signiWcant discretion over the
health care resources that governments have to pay for. Policy makers have therefore
only limited possibilities to control the expenditure for these services. In an eVort to
regain that control some governments have attempted to challenge, with various
degrees of success, the clinical autonomy of doctors through the creation of internal
markets and other measures inspired by the New Public Management approach.
756 jonathan wolff & dirk haubrich